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tv   Mad Money  CNBC  December 10, 2013 6:00pm-7:01pm EST

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interesting. >> what gummy bear do you have? >> they're all the same. >> they're not the same. see you tomorrow again at 5:00. don't go anywhere. mad money starts right now. >> to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money". william to cramerica. my job is not just to entertain, but to coach and teach, so kwaul me at 1-800-743-cnbc. in the stock market, just like in real life, bad leaders can be extremely worrisome. that's right. sometimes we get the wrong leadership.
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the wrong stocks shoot higher. >> boo! >> while at the same time other stocks are faltering, and we saw that with the dow declining 52%. now, you might wonder isn't all leadership good? leadership from a market's perspective, isn't that what we want? no. doesn't work like that. can't we just be excited that any stock step-up and trying to lead the market higher? who exactly were today's generals? first, we got remarkable leadership today from social media stocks. twitter, facebook, yelp, and linked in, all charged right over the top. general twitter, four star, to great fanfare at the beginning of november, and opened at $45. then traded to the high 40s that day before settling down around where -- then you saw twitter drift down to $39 in a matter of days. at that price twitter got hit with a wave of short selling aided by a strong push by several talking heads and hedge fund advisories urging people to dump the stock.
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i saw some of the short selling negative including myself. one devastating video couldn't have been more wrong, but, boy, that got people just piling on, and that's when twitter stocks started changing direction and powering higher. aided in part today by a research piece from sanford bernstein suggesting that companies finding great favor among advertisers right now. that's right. advertisers like the twitter product, according to bernstein. next thing you know twitter is riding on the backs of the short-selling hedge funds that had to break down because all the hot social media stocks have broken down since they're overvalued versus traditional companies, right? the pattern that short sellers expected, a rapid spike inspired by individual investors followed by a vicious swoon as these retail investors panicked. well, guess what, this didn't happen. i think the shorts were too clever by half, and they're paying the price for it over a powerful move. twitter's struggle has become a
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umbrella for a host of stocks, including good ones that i have liked in the past like facebook, yelp, and linked many. when we think about the pattern of social media ipo's the disastrous facebook deal comes to mind. well, then we understand why the short sellers got so greedy. after your pain facebook was sent back to orbit by success in navigating migration from desk top to smart phone. our charitable trust road this to almost double. then we took profits? bulls make money. bears make money. hogs, they get slaughtered. stock then drifted down. felt like a genius. now that twitter's success is driving facebook right back up. in part, because facebook is much i cheaper than twitter. if you believe in twitter, you should be a huge buyer of facebook. that's the relative valuation game. if you buy in an environment that it builds a head of steam out of nowhere, that's lieutenant general facebook to
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18. yelp, a huge amount of stock and the deal -- i spoke to the ceo last month. we visited the cloud conference hosted by sales force.com, and i thought this was a good company with revenues that has a story that makes a ton of sense. but yelp is in grab mode and trying to take over the world and become the dominant worldwide on-line yellow pages. that's the analog here. right now it's not focused on turning a profit. that was not considered acceptable to those twitter-led resurgence of late. now yelp's stock has found its footing, and it's turning around, and it's got the mo. linked in has had a similar trajectory. this wants to be the on-line catalog of professionals, white collar white pages so to speak. in none other than the gross stock favorite -- the market didn't like that prescription for growth. the stock got hammered mercilessly after reported at the end of october. now linkedin is climbing back.
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many regard it as the amazon model. it comes back into vogue. amazon up, of course. all these companies have another trade in common besides being social media stocks. they are heavily shorted because they're wildly thought to be overvalued. let me just say that i never shorted any stocks just simply because it was overvalued. valuations is in the eye of the beholder. you have no way to say, ah, this stock is too expensive because there are hundreds of billions of dollars managed by investors, but they are thinking ultra long-term. you think they're momentum people. go ask people that shorted amazon or netflix because they thought it was expensive. how did that do for you? all four of today's leaders might well be going on the out years, meaning how they'll perform a few years hence. don't laugh at this. facebook bounced from $18 to $50 because it managed to pull forward to the people in the out years.
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they were wrong, wrong, wrong. they'll shrug their shoulders, and they'll say just you wait. ulta salon. isn't that the poor man's sephora. green mountain coffee, that was driving -- pvh up $3. this once is bouncy and comes back to. that's causing a short. green mountain is a -- the noise about single server soda makers causing the stock to get jiggy, and that, too, is against the grain short squeeze. can i get one of those machines? pvh is a simple case of the market not respecting the bank act of the ceo. conxwrat las vegass on being a grandfather. the stock has been heading down all day yesterday, and then when the earnings came out, they plunged another five. we like what we heard from manny. he sat right here and told us a great story. the panicers came out. the short sellers pushed it
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down. that kept the stock down. manny conducted a conference call where he reiterated and the stock rallied ten points to the short sellers. yet, another squeeze as the stock finished up $4.44. >> not on the pain of those that held losing bets against expensive merchandise. they also hate to see -- brian williams has never done that. they hate to see the long-term leaders get taken down too, and we saw two terrific leaders of this rally get crushed today, and it hurt the psyche of the market. starbucks and juliet. starbucks fell after a rumor from research sales that sales are soft. i've heard nothing about that from my sources. it was because of an interview given to express scripts where the company asserted it was trying to premoat a price war among makers of drugs for hepatitis c. i'm suspicious of this kind of
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story. a rebuttal by brokers firm appearen himer saying the comments were taken out of context reversed the direction, but not enough to wipe out the decline. we do have periodic bouts with extreme short selling rally. i wouldn't think that much of it. here's the bottom line. the bottom line is that the market rotation is now extended to the social media stocks, while its senior growth stocks are resting. remember, i am not going to call any type of social media. if we get a second day down for gill yad and starbucks. those are two long-term leaders. terrific entry levelled brought on by innuendo, misinterpretation and profit taking. joe in new york. joe. >> caller: greg. >> no, it's jim. oh, let's go to greg in new york. even better than joe.
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greg. >> caller: i bought the stock symbol enta a few weeks ago after they partnered and promising new hepatitis c drug. it's been pretty much pair bolic. did i ring the register? >> this is what -- they're pinning these guys against gilliad. i think there's room for both. you know what i can do, i like ka-ching. let the rest ride. i feel bad for joe. let's go circling back to joe. joe in new york. joe. >> caller: joe from rochester, new york. how are you doing snoent. >> couldn't be better. how about you? >> caller: i'm doing well. i know today the 3-d systems got upgraded today hul emt packard is talking about getting into the printing business, is this batdz? >> it could impact the stocks eventually, and they do have an interesting israeli 3-d
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business. however, these stocks and other firm recommended close tonight. i wouldn't get in the way. i would not short these stocks. these stocks are going hire. we like stratuses. we don't like fossil jet, but they are out of control on the up side. they are the true bubble in this market. it's a changing of the generals. the markets in rotation. social media is leading the way. the darlings, don't worry, see your growth stocks, they'll be back. "mad money" will be back. >> coming up, weather resistant? giii apparel knows how to keep you warm. better than expected earnings the stock 15% in the past week. will the wintery weather help its outer sales soar or will the customer be snowed in? don't miss cramer's exclusive. and, later, tapping in. it's been a wild ride from the 2012 highs to its fall from grace culminating in this year's 150 plus point rally.
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tonight cramer checks out what could be ahead for apple. plus, smoke alarm? decreased regulation is causing its fair share of anxiety around the tobacco industry, but upstarts like electronic cigarette maker njoy have lit a new spark of interest. will innovation reignite advice. cramer finds outs when he goes off the tape. all coming up on "mad money". [ male announcer ] the new new york is open.
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>> when it comes to retail, it's the taim of two cities. they're all about the have's and have-not's. tonight we have a chance to check in with one of the have's.
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giii apparel. here's a little $38 billion apparel company. it's up nearly 100% for the year. a significant 500% return sense the last time we spoke to the ceo way back in 2006. that's a six-fold increase in less than eight years. pretty phenomenal track record. what do they do? the company licenses big brand names, including calvin klein and tommy hilfiger, and they sell things like outer wear, sports wear, women suits and accessories. they don't just license clothing. they also have license with all four major professional sports leagues in the country, including exclusive outer wear deal with the nfl. you might have worn it and not known it. they have proprietary like carl banks, kyle g along with retail stores mostly under the wilson leather banner. now, giii reported last week. the company knocked it out of the park. substantially stronger expected
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sales grossed 23% year over year. no wonder they vaulted with a 13% response. can they keep up the momentum? let's check in with the apparel ceo to learn about the company and its prospects. welcome back to "mad money". how are you? >> great. >> the first thing that went through my mind was, well, they got luck where i apparel. they got lucky weather. then, you know, i remember, no, this is an old family business. we don't see many family businesses left on wall street. family businesses, i think, do things differently from our public companies. >> it's a family business founded by my dad in 1956, and operates very much like a family business today. we've acquired companies. they all integrate, and i don't want to be trident and have these cliches that everybody is expecting, but it is a family. there's acquired a business eight, nine years ago owned by a man named sammy aarons.
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he did a wonderful job integrating it auto to the family and creating a leadership role for himself and building calvin klein into a mega brand for our company. >> now -- >> there are many people like that in the company. >> what i think is important is for people to understand that morris is fully invested in giii. this is not something you're going to go and then go to gm after this. you retire, then you'll be like a fit investor. you'll be with this company. >> it's my company. i have been there for 42 years. where am i going? i'm not qualified to do anything else. >> let's talk about what you are qualified to do. you own stores. you put out some great apparel. you have defied a lot of what people think about what's happening in retail? what is your secret? >> my secret is we're an aggressive company. we've targeted diversity as our mantra. we've diversified the company from a leather coat company, as you knew it many years ago, into one of the dominant apparel companies in the women's sector
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servicing every retailer in america and one of our brands are private label and approximately an entity that today has a half a billion dollars of retail sales direct to consumer. >> we all know pvh on the show, but talk about the interaction. pvh bought warnaco. you are calvin klein too. does pvh not covet your calvin klein? >> i'm sure they covet it. manny is a dear friend, and an amazing business partner. we license many classifications from pvh. we succeed in every one of them. the relationship has never been better. we collaborate on the future. the future that affects both our companies, and i couldn't ask for a better relationship. >> now, one thing that i really find compelling is the notion that americans still crave brands. they love them.
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even in hard times, right? >> they love them if you do them right. not every brand works. the underlying secret is the management team that builds the brand, the design, the pricing that marries to the brand, so it's simply not the brand. it's the collaboration of the brand and the talent. >> take ivako. it's doing very, very well. you just brought that in. that's a name, but you are creating this brand. right? >> the brand was created clearly by ivanka. >> okay. >> she's very clear and very popular to her demographic. the 25 to 50-year-old customer loves ivanka. she's imersed in her own brand. she's, again, the collaboration between ivanka and giii is amazing. she's in the trenches with us designing the product, designing the showroom, hiring the talent, so it has to succeed. the passion that she has, the
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inertia we have going in the apparel industry is going to make this a power brand for giii. >> last question, morris, how do things look for the holiday season versus last year, including the fact that wilson just had 10% comps. how is the season going for you? >> the season has gone incredibly well through october. traffic seems to be down for the early days of december. we're hopeful that it recovers. our business has been great. the sell-throughs, a lot of our product is off the retail floor. we don't see any risk to our business. pretty much in all our brands. you know, we've got about 20 different brands, and they're all safe from catastrophe. >> i like that. i think that's certainly -- i'm sure you join me in wishing manny good luck as a new grandfather. >> absolutely. >> all right. morris, thank you so were. >> thank you. >> that's chairman and ceo of giii power group. it's been an outstanding performer, and, by the way, all the stuff that you can read about is very accessible for you, and you can find their
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stuff. maybe you should be buying their stock. stay with cramer. >> coming up, the apple stores may be packed for holiday shopping, but will that help the i-device maker touch its former highs? later, it's close, but it's no cigar. njoy has sold more than three million electronic cigarettes from over 80,000 retailers nationwide. is this the future of investing in vice? all coming up on "mad money". it's estimated that 30% of the traffic in a city
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is caused by people looking for parking. that's remarkable that so much energy is, is wasted. streetline has looked at the problem of parking, which has not been looked at for the last 30, 40 years, we wanted to rethink that whole industry, so we go and put out these sensors in each parking spot and then there's a mesh network that takes this information
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sends it over the internet so you can go find exactly where those open parking spots are. the collaboration with citi was important for providing us the necessary financing; allow this small start-up to go provide a service to municipalities. citi has been an incredible source of advice, how to engage with municipalities, how to structure deals, and as we think about internationally, citi is there every step of the way. so the end result is you reduce congestion, you reduce pollution and you provide a service to merchants, and that certainly is huge.
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it's been about a year loss. apple has started come back with a vengeance. the stock has rallied from $400 to $565 where it is right now. that's a 41% gain. that said, even after this remarkable rebound apple still up only 6% for the year. you know this is double -- year -- it's more than 20%. that's because it spent the first six months of 2013 dropping like a rock. the question now is can apple keep up the momentum? in other words, is it too late to buy apple, or does this rally have legs? tonight we're going offer the charts with the help of not one, want two, but three technicians to figure out where apple could be headed. you need more than one technician when you got a real problematic situation. this is problematic. let's start with carolyn, a top
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notch charter, and she also has to be one of my colleagues at real money.com. she told us the charts were saying apple is headed higher. at the time the stock was trading below $500. she nailed it. okay. what now? take a look at this daily chart of the action of apple. borroweden says he thinks it could make it up to $792. that's our ultimate target. price target is based on the methodology that uses numbers, a series of ratios developed by -- they reoccur over and over again in order to predict future stock wins. her record speaks for itself. borroweden is following apple. this caught my eye. she says the stock needs to clear a major hurdle that's going to keep moving toward her price target sooner rather than later. that hurdle, okay, borroweden sees a tough ceiling of resistance running from $575 to $528. that's why i mentioned this twice already. it's because of borroweden's work. like all important price levels, that ceiling comes from
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relationships. $5 p 5 for apple represents a 61.8% swing from the 2012 high to the april 2013 low. rallies often peter out around that 61.8% trade reversal. i have checked this hundreds of times. it's true. there are a couple relationships many the same sort of resistance. i don't know if you saw, but it quickly pulled back 15 points the next day. what's the matter? what's the matter? it was the chart. if apple can clear the hurdle relatively quickly, borroweden hopes the stock will move on. ultimately heading for the long-term target. if it fails to clear the hurdle from 575 to 583, she thinks it could get hit for a correction. that says that pullback would be viable, but it would postpone the next leg of the rally. i can see a trend, yeah. you know, not going to say severely, but obviously if it loses momentum, it's going to get hit. the fibanacci queen thinks -- it's a make or break level. since this is a super important stock for all of us, let's get a
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second opinion. bob lange, another great technician who is my colleague at real money.com, as well as being the founder and senior strategist at explosive options.net, and the trifecta new product that the street has where he just nailed master card. i wish i had done that. thinks that apple has a beautiful, beautiful chart. check out lange's version of apple. in his view the stock is resting at a spectacular 10% run on strong volume. it took place over just eight trading days. now, look at the moving average convergence indicator. that's the bottom of the chart. this is a tool that technicians use to change trajectory before they happen. with apple it is in positive terms since the stock broke out in september. it just made a bullish crossover where the black line crosses above the red one. you can see that. black over the red. you see, this bullish crossover, this thing right here, that's about as close as can you get to a neon says that says bye-bye,
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buy, buy. the rsi at the top of the chart is in very positive territory. this is a momentum indicator. it's just the line that apple could be resuming its place as a market leader. once it took out this is when it really started taking off. that's the momentum indicator. apple is only up 6 periods of the we're. it could be time for the stock to play catchup for the rest of the market. he sees the big rush to buy this stock through the end of the year. it's happening right now. lange believes it will propel it above $600, relatively shortly. wrau. three weeks. however, the real bullish picture for lange is apple's weekly chart. take a look. it's a thing of beauty. first of all, can you see for the last 12 odd months apple has been making, yes, a w formation. very reliable. one of the super bullish patterns we've been following. since july this stock has been roars since it traces out the right side of the w. meanwhile, apple showing very strong momentum on the relative strength indicator. that's always going to be at the top of the rsi, and the stock
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recently tagged a new 52-week high. when you look at the very bottom of the chart, that's the williams percentage r oscillator. that tells you whether a stock is overbought or oversold. just like -- we also use it on and off the charts. in this particular case, the stock is clearly over bought on a weekly chart. whoa. be careful. this is good news normally. it suggests the stock is coming up too far too fast. apple is not your normally overbought stock. lange says it's embedded. in fact, it suggests that apple has the momentum, and it needs -- it will continue to roar higher. last but not least. got to bring in a third because now we have one person who says it's not going to make it. another person says it's making it right now. let's bring in tim collins, another fabulous technician. check out this apple monthly chart. i know it looks like a weather pattern. bad weather pattern. it looks like today's weather pattern.
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collins thinks the monthly is what matters here. he says if you are willing to be patient with the chart, that it could be in the end stages of forming an incredibly bullish pattern. this ultra long-term chart charts all the way back to 2005. for eight years the stock has stayed above the floor support level. that's extraordinary. even during the financial meltdown in 2008 and early 2009. the apple crash late last year, still above this trend line. the fact is this support line has never been breached. the stock came los to this past summer, and spring, but since then it's come bouncing back. it's still at the low end of the trading channel. just as important, collins points out that apple could be forming, yes, another great one. the cup and handle pattern. okay. you see it starting to develop. remember, this is where you got a cup shaped bomb followed by a handle, and the stock trades sideways and then after the handle you tend to get a terrific rally. collins thinks if apple can form the handle between 550 and 600 that any break-out could segment naul an epic long-term move.
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$900 price target from collins. perhaps as soon as late 2015. you have to remember this multi-chart, and it pays over years. 15% high over 24 months. i can't time the next leg of the ladder. here's the bottom line. can the apple comeback continue? there's some wlikt in the interpretation of drugs. bob lange says it's over $600. by the end of the year. carolyn worries that am immediate to clear the hurdle of resistance around 575, or the stock could lose momentum. the monthly as intrepd by tim kol linz saying that am has never stopped being a terrific long-term story with enormous upside if you are patient. as for the fundamentals, i think the rest is pretty simple. apple is a buy. why don't we go to bola in texas. bola. >> caller: hey, jim. how are you doing? boo-yah. >> i'm liking that.
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>> caller: jim, i've been watching this stock, and they released their earnings like a month ago or so, and they've just been going down. when i was reading in between the lines here, i heard that one of the reasons why they missed their target, they spent a lot of money on investments, so now it's gone down maybe 30%. is it a good time to go in now as a long-term? >> this is the most commodity-oriented part of the cloud. i got enough problems with sales force.com, which i like very much, which is proprietary. i don't think that rack space has anything proprietary that makes me want to own the stock. i don't want you to own this. now michelle in florida. >> caller: hey, jim. how are you? my question is about netflix. actually, it's two-fold. they're off balance sheet. they've never addressed it before. the second one is about their so-called original intent. from what i understand, they don't actually own these -- they just own what is called the first window viewing, so how does that factor into their
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valuations and do you think the street is misunderstanding this? >> no, no. this is a company that exists on subscriber growth. it's a simple metric. how much does it cost to have spiral growth? those shows are basically advertisements for netflix. people subtribe on that. i think netflix is the solution for a lot of companies to buy, including facebook, even twitter. i got to tell you, as far as i'm concerned, netflix has great momentum, and that means that momentum buyers will continue to like it and there is also a monumental short squeeze going on in netflix too. we're always getting you the core of the issue. there are two sides -- well, actually, no, make that three sides of apple's story. two too cheap for me not to take a bite. look at this. it looks like it's going to be snowshowers here and clear here and then, i don't know, hot, hot, hot. stay with cramer. [ tires screech ]
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it is time -- it is team for the lightning round. buy, buy, buy, sell, sell, sell. you hear this sound, and then the lightning round is over. are you ready skee-daddy? let's start with tim in michigan. tim. krirjts hey. how are you sh? tim from michigan. >> well, i'm real good. how are you, tim? >> caller: what is happening with chevron? >> oh, chevron is going higher. trade it off. i tell you, exxon had a better quarter. it's got the backing of warren buffett. i believe that's good. let's if to sam in my home state of new jersey. sam. >> caller: hey, how is it going? >> real good. ho about you, sam? >> caller: not too bad. not too bad. >> what's on your mind? >> caller: i was wondering what do you think about the animal health stocks, the symbol bts. >> we had the manager on last week. i think that's a terrific story. >> buy, buy, buy. >> we got to get into this,
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though. this stock is terrific. mike in new jersey. mike, mike, mike. >> caller: hello, mr. cramer. how are you? >> real good. i wish it were hump day. what's up? >> caller: i just added two stocks to my portfolio. one of them being halliburton. the other one chenaray energy. >> i like the limited partnership now. i like the lng, but like the limited partnership more. when it comes to your -- to halliburton, it's an inexpensive stock, but i prefer slumberge. >> how are you doing? a big boo-yah from chicago. actually, naper ville, illinois. how are you? >> i thought the mike ditka thing, i almost cried. that guy is so fabulous. in real life is he really nice. what's up? >>. >> caller: real quick, i want to say hi to miss laura and my aunt diane. where do you think the stock is going to be one year from today and why, jim? >> you got horse sense. recommended after the close today by citi. i think the stock probably could
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go to six. i have been behind it now for a very nice gain, and i don't think it's over because i think they're winning a lot of contracts in europe. i need to go to mark in ohio. mark. >> hey, jim. boo-yah for me and my young investment team in cincinnati. >> i love that. the bengals d better hold up this weekend. it's really important to me. what's up? >> caller: hey, tell me about accenture. >> the last couple of quarters people have been not liking it, and there's been a series of downgrades. i think it's a good stock. i want to wait until it comes lower to see what everyone is so worried about. i didn't think the quarter was that bad. let's go to silas in new jersey. silas. >> caller: hey, jim. how are you? >> how about you, silas? >> caller: doing well. from your hometown. i just had a quick question. what do you think about sun power? >> i'm not buying any cocktails for you unless you buy first solar. you'll be going to some other restaurant because that's the one i like. i'm not done. you know, i feel like taking more calls.
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let's about to jeff in ohio. jeff. >> caller: monmouth realty? >> we don't like those stocks. we don't like the real estate investment. if we're going to be in a net lease, we're going to buy arcp. as interest rates go hire, this group goes down. that, ladies and gentlemen, is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade. it told him what was happening on the trading floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade. to help secure retirements and protect financial futures. to help communities recover and rebuild. for companies going from garage to global.
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>> intoefd somebody invented the device that could make tobacco obsolete? the product that could give smokers the nicotine kick except without the smoke or the repulsive smell and the carbon monoxide? wouldn't tb a public health miracle? i'm talking about electronic cigarettes. while they're definitely being embraced by smokers as the kinder, gentler alternative to real cigarettes, they've become controversial within the public health industry. that's why tonight we're going offer the tape to get a better sense of what's happening in this rapidly expanding industry with the help of njoy, a privately held company that controls 40% of the market for e-cigarettes in the united states. in the past few weeks this has become a major business. electronic -- just in a very
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short time. a couple years. i don't know if you have seen this. this is a billion dollar market in the united states. this is a $3 billion market worldwide. it's been growing at 100% clip for the last three years. the maker of newports has been getting a huge boost from the e-cigarette business, and mill ip morris gets into the game next year. 40 state attorney generals sent a letter to the attorney general asking for them to be treated like tobacco products. the new york city council held a hearing on whether to ban them in bars, restaurants, and public spaces. while most states don't currently targeting e-cigarettes with specific taxes, minnesota slapped a 95% tax on them last year, which effectively makes electronic cigarettes more expensive than real ones. that can't be good policy, can it? it brings me back to njoy, the maker of njoy kings. the most electronic cigarettes with the most traditional cigarette look and feel. i think this industry could have actually been a perfect place to
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invest down the road if the play started to become public. that will only be the case if the regulators don't strangle this business in the cradle. let's take a look with craig weiss, president and ceo of njoy, to learn about this rapidly growing industry in an off the tape segment. mr. weiss, welcome to "mad money". >> thanks for having me, jim. i appreciate it. >> mr. weiss, i have to admit that the reason why i even have been doing this segment is i was sitting next to my nephew who happens to be my head writer, cliff mason, and he pulls one of these out at thanksgiving, and it doesn't smell and it doesn't bother anyone at the table. it's a big family gathering. then i read a piece, and i cannot believe that people that -- that governments aron the world don't recognize this is the way to fwet people off bad tobacco. not start smoking. why are they so obtuse? >> you know, it's an emerging category. fortunately for us, some of the countries, like in europe, are starting to see that this is -- electronic cigarettes are really
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part of the stlugs and not the problem. i'm confident with the science that it gets published more and more that america will come around as well, but the data is extraordinarily encouraging when you start to see so many smokers switching to electronic cigarettes. it's very encouraging. >> now, are there studies -- i know there was a terrific -- watch the university professor with a quote in the "new york times" basically saying, look, this is -- we know tobacco is bad. we know the anti-smoking movement is so opposed to the smoking that it transseconded the science. this is a scientific argument that this is what we should be using. why is that holding no sway with the fda? >> i think part of the issue is i think it is holding some sway with the fda, but i think part of the problem is for so long they've been fighting big tobacco and justifiably so, and so there is a little bit of -- you know, they feel like they've been burned before by whether it was the filtered cigarette or other products that were held
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out to be better for you tobacco products, and so it's a little bit of maybe a disbelief or certainly an initial apprehension or skepticism that these products, especially ones like ours, that look so much like cigarettes, could, in fact, be, you know, part of the stlugs, and so there's that skepticism, and, you know, i think unfortunately a lot of them full into this -- in joe's piece, as he talks about it. well, if it looks like a duck and quacks like a duck, but that's not science. >> wouldn't these wipe out the tobacco pieces? who would want to smoke something that gives you cancer versus something we know has to cut back on the number of cancers caused by tobaccos? >> well, that's the really exciting thing about the data that's emerging now. the cdc recently had this data that showed that as electronic cigarettes gained in popularity tobacco cigarettes are declining. that wasn't what was happening just a few years ago. now m last, you know, one or two years as electronic cigarettes are becoming more and more
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popular, tobacco cigarettes are declining, and i think that's something that public health should be ecstatic about, and certainly at njoy, our publically stated mission is to ob stleet cigarettes. we're quite thrilled about it. >> i would like to go long your company, njoy, and go short a not great tobacco company. when are you going to give us an opportunity to do that? >> well, obviously my sole motivation would be to get back on your show, so that's going to be the driving force in any decision that we make about going public. we're seriously considering all of our options, but we love the fact that we're independent, whether we're private or public. we want to maintain our independence, and we're going to continue in our mission every single day to figure out how is it that we can make better and better products so that we can accomplish, you know, our mission and live in a world where, you know, where my kids can say, you know, you light these things on fire and you put them in your mouth, that doesn't make any sense. that's what we're aiming towards. >> do you have enough wherewithal to fight in new york city's ban?
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if that happens, can you stop that? >> well, we're working to do that now. we've testified in front of the new york city council, and we've done so in every state or city that either tries to tax electronic cigarettes or do -- or premoat an indoor smoking ban. what's really interesting is the leading anti-smoking ngo in all of the u.k., ash, action on smoking and health, these are the paramount anti-tobacco ngo and all the u.k., they're opposed to indoor smoking bans for electronic cigarettes, and so in all of these cases we keep saying the same thing. where is the signs? where is the data? the answer we keep getting is, well well, don't have the science and we don't have the data. we always ask ourselves -- ask the same question. is it really responsible for government policy makers to be making regulations when they say we don't have all of the information, but we're going to regulate? i don't think that's the appropriate way for our government to behave. >> i totally agree. i hope that you actually do come
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public, and i think as a exercise we could also get people off the tobacco. thank you so much. njoy. great to have you, sir. >> thanks, jim. >> for those of us who have family members who smoke, it's a pretty darn good choice. stick with "mad money". [ male announcer ] the new new york is open. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state.
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and get ideas! yea i have an idea: how about trading that in for a salad? [ male announcer ] so come trade at the place that's all about options and futures. optionsxpress. open an account today and get a $150 amazon.com gift card when you call 1-888-330-3137 now. optionsxpress by charles schwab. >> where would j.p. morgan be if the rule had -- i would say probably $65, almost ten points
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higher than where it closed today. where would goldman sachs be? maybe as high as $200, $30 and change from where it went out. it's hard to get your head around how wrong the media has been on this volcker rule stuff? we think he is a manchurian candidate. frank sinatra, major ben marco, tries to pull oughtle wiring out of the candidate's head, and he fails. that version, like the movie, is fiction. surely banks fought the volker rule tooth and nail because it -- namely from firms borrowing a lot of money and then laying down stocks. of course, they're going to fight for a opportunity to make money. that's what they do. plus, the rule creates more compliance costs than anyone who works at one of these banks and they know it's a dead wait loss and a huge pain in the butt to deal with. especially when it's rigorous, and not just there to for show. a lot of opposition to volker was political. we care about earnings and not politics. how did the volker rule impact
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earnings? let's just say that not only will it not impact earnings beyond maybe a penny per share, as people in the structure set up to comply, and that's already been taken. the banks might see a major windfall to not necessarily their earnings, but to their price to earnings multiples on those earnings. i think this rule could set them up. maybe even dramatically as we saw from the nation rally in the group that we got just today. why? because the single biggest valuation since the great recession is what happened to jp morgan with the london whale incident. it's a lack of insight incident that cost them about one-third of their value. investors decide thissed group itself is filled with unregulated gun slingers. who aren't reigned in by anyone because if the gun slingers make billions in proprietary trading, the bonuses will be fabulous and if they lose a ton of money, they still won't lose their jobs. they can just blame the direction of the market and the shareholders are the ones that get clobbered. win-win.
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now those who play the whale will get hunted like moby dick. the ahabs, the ceos, could even be prosecuted under a loose interpretation of the law if they engage in whale-like behavior. that's a huge and positive change for the group. i think we'll presume there is less rogue behavior, the investment banks, and will begin to value the stocks like their investment streams arks was the case with morgan stanley, which stock has rallied and become a volker compliant bank and done so with gusto. it's the biggest rally of the regional bank, and the nonbank financials like master card, which soared after a 10 for 1 split. big buyback. foe financials where a lot of investors got their monies because of worries if if they own a center bank, that the volker rule applies to, it might blow i was up with trading or an embedded hedge fund or the kind that's been bad. no one was ever going to be able to put a pe multiple on proprietary due to the dbl
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whammy of inconsistency of the earnings streams and the possibilities of whale-like activity. why so much on the volker rule? why so many articles why this is -- banks always fight regulation. that's what they have to do. any regulation of any kind. that's in their dna. second, because the media simply doesn't focus on the earnings or the evening kwael boring process of figuring out the p.e. multiple, what will pay for the series? that's what this he do on "mad money". they left us this franchise. for banks the earnings streams are indeadible post-legislation, and it's much ease wrer to understand, all thanks to paul volker and his merry band of p.e. raising congress multiples. thanks for driving stocks up for once. thank you. why couldn't you have passed this legislation two years ago? who knows how high the bank index might have been? stay with cramer. [ male announcer ] here's a question for you:
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energy lives here. take the energy quiz. in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. the united states population is going to grow by over 90 ovemillion people,ears and almost all that growth is going to be in cities. what's the healthiest and best way for them to grow so that they really become cauldrons of prosperity and cities of opportunity? what we have found is that if that family is moved into safe, clean affordable housing, places that have access to great school systems, access to jobs and multiple transportation modes
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those are probably the next places that rally. i like to say there's always a bull market somewhere. i promise to try to find it just for you right here on "mad money". i'm jim cramer, and i will see you tomorrow. special edition of the kudlow report coming live from washington, d.c., and the breaking news tonight is here in washington where a budget deal in congress has finally been reached. congressman paul ryan and senator patty murray made the announcement moments ago. we'll talk about this agreement with our special guest tonight house republican majority lead eric cantor who is also live. another big story in washington, comes from cnbc's own steve liesman. he's reporting all the triggers for a fed bond tapering have been hit and the fed may come out this month of december at their meeting next week and
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